G.R. No. 94524 - SPS. FEDERICO L. REYES AND MAXIMA DELA PAZ; SPS. SILVINA L. REYES AND CESARIO SANTIAGO; SPS. VICENTA L. REYES AND EMILIO ESTEBAN; SPS. IRENEO L. REYES AND JOSEFINA DEL FIERRO; SPS. LEOVIGILDO L. REYES AND JOSEFINA OCHOA; AND FELIX L. REYES, VS. COURT OF APPEALS, AND THE REPUBLIC OF

Ruling

WHEREFORE, in the light of the foregoing, the decision of the court a quo dated April 17, 1986 is hereby SET ASIDE and another is rendered: a) Declaring Original Certificate of Title No. 727 in the name of the heirs of Antonia Labalan as null and void and all other derivative titles, if any there be, are hereby ordered cancelled and b) Declaring that the land covered by the cancelled certificate of title be reverted to the State including whatever improvements introduced by the defendants which are ordered forfeited in favor of the Republic of the Philippines." [2] The factual backdrop of the case, as accurately summarized by the respondent court in the assailed decision, is as follows: "Antonia Labalan filed with the Bureau of Lands Homestead Application No. 214067 on February 17, 1936 (Exh. '2'). The same was approved on April 23, 1937. On December 28, 1937 the applicant died survived by her children who are the defendants in this case (Exh. '5'). Before the application of the homestead patent by Antonia Labalan, she was already residing in the said place and made improvements on the land. After her death, defendant Federico Reyes, one of her children continued to reside therein. After the land was surveyed, Federico Reyes filed the required Notice of Intention to make Final Proof (Exh. "3"). On January 2, 1941, Homestead Patent No. 64863 was issued in the name of the heirs of Antonia Labalan and the corresponding Original Certificate of Title No. 727 was issued (Exh. '1'). "SOMETIME in October 1968, a certain Mary Agnes Burns, a resident of Olongapo City, filed with the Bureau of Lands a Miscellaneous Sales Application (Exhs. 'O,' 'O-1') over a 50-hectares property she allegedly purchased from Salvador Moreno on November 23, 1955 (Exh. 'I') located in Matain, Subic, Zambales. Included thereat is the property covered by O.C.T. No. 727. She allegedly made improvements on the land. She likewise constructed roads thereon after securing the necessary mayor's permit (Exhs. 'K,' 'K-1,' 'K-2'). Declaring the property in her own name, she also paid the yearly taxes from 1965-1978 (Exhs. 'M' to 'M-6') and from 1979-1982 (Exh. 'N'). Notwithstanding the land she bought was still within the Naval Reservation Area and therefore part of the forest zone, Mary Agnes Burns nevertheless took the risk of occupying and improving the land after verifying that the same would be released for private disposition. "Acting on Mary Agnes Burns' request for survey authority, the Bureau of Lands ordered Land Inspector Mateo D. Sicat to inspect and survey the property. In the report dated December 23, 1968 (Exh. 'P'), the latter favorably recommended the survey endorsed by District Land Officer Rodolfo Paelmo on January 3, 1969 (Exh. 'P-1'). Mary Agnes Burns also learned from Sicat's report that the titled property consisting of 20 hectares adjacent to her property is owned by Natalia dela Paz. Knowing that said property is within the forest zone hence inalienable prior to